Dailyhunt raises Rs 168 crore from Chinese peer Bytedance

Local language content platform Dailyhunt has raised $25 million (Rs 168 crore) in a new round of funding led by China's Bytedance, itself a content aggregator in China, which is backed by investors like Russian billionaire Yuri Miliner's DST Global and social media major Sina Weibo.

The Bengaluru-based company has also raised capital from Arun Sarin, former global CEO of Vodafone Group besides existing backers like Matrix Partners India, Sequoia Capital India and Omidyar Network.

While valuation for the new round could not be ascertained, the deal has been done "at a premium" to its previous round valuation of Rs 1,700-1,800 crore, according to company executives. Avendus Capital was the advisor on the transaction.

Content aggregators like Dailyhunt, which provides news and ebooks in vernacular languages, are expected to benefit from the 4G tariff wars with the entry of Reliance Jio. The company recently invested in OneIndia to generate multimedia content, especially short format video and audio, for its users. DailyHunt already receives a tenth of its monthly active users from Jio.

"With the current stimulus in the data market overall users coming to internet are increasing resulting in more consumption," said Virendra Gupta, founder & CEO of Dailyhunt.

The Bengaluru-based company has an annual revenue rate of over Rs 100 crore and aims to go over Rs 1,500 crore in the next four years, by capturing 6-7% of the $4 billion digital advertising market. Besides advertising on the platform, it also earns revenue by selling ebooks and payments.

Dailyhunt has already built a sizable user base with over 120 million mobile application downloads and 28 million monthly active users who read 4.5 billion pages. In the next four years, it expects monthly active users on the platform to increase to 150-200 million.

As the Indian internet user base expands to 300-400 million, social media and content consumption are increasingly becoming the first use cases for many of them, a market which Dailyhunt targets. The advantage company has is that not many platforms are focusing on vernacular language users.

“Rural consumers spend about 40% of their total media time on digital media- the same as urban consumers-although they have different reasons…….ability to tap into the latest media content at low cost, receive constant updates and gain access to vernacular and geographically diverse classified content,” said a recent Boston Consulting Group report.

With the investment, Bytedance founder & CEO Zhang Yiming will join the Dailyhunt board. "Dailyhunt is serving a huge unmet need of providing local language content to Indian mobile users and has grown with its localized approach ad-business model," Yiming said in a statement.

Bytedance has 140 million monthly active users across its portal Jinri Toutiao in China and TopBuzz in US and Brazil. According to reports, it was valued over $500 million in 2014 and is pegged as the next multi-billion dollar valuation startup after cab hailing app Didi Chuxing and group deals site Meituan.

Bringing Bytedance on board is expected to help Dailyhunt with experience of how to expand the business. Both also count Sequoia Capital as a common investor.

“They have seen the cycle which is going to happen in India in the coming years,” said Gupta, a former Bharti Airtel executive who founded the company in 2007. “We get a lot of knowledge about personalisation of content and machine learning to increase customer engagement at a large scale.”